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Anyone know anything about - yawn- Capital Gains Tax?

(12 Posts)
SecondhandRose Wed 27-Apr-05 19:45:55

If two people own the house do you get two lots of tax relief or just one? What percent is it? Do you still pay it if you buy another property?

PinkFluffPudding Wed 27-Apr-05 19:52:38

If you have lived in the house for less than 12 months you may have to pay CGT on whatever profit your house has made since you bought it - even if you move to another house.
If the house is in both names/ you are married then yes you do get 2 lots of tax relief... 8K each as an allowance per year (so, dur, 16K) and on top of that you calculate tax according to income. If you both pay higher tax rate then you will have to pay 40% CGT. However if neither/one of you pays lower rate tax then whatever is left to get to higher tax rate (approx 60K per annum) is charged lower rate. All above that goes to higher rate.

That was the position last year anyway...

frogs Wed 27-Apr-05 19:53:20

Not a lawyer or an accountant, but as far as I know no capital gains tax is payable on your main residence.

If it's a BTL then capital gains tax is payable. Not sure what the exact threshold is for CGT, but in region of £7K. It might depend on how you owned the property (ie. joint tenants or tenants in common) and who put what proportion of the money up, but my understanding is that you would each get a CGT allowance, so between you you could make c. £14K capital gains before any tax became payable.

Have a browse of this for more info.

CountessDracula Wed 27-Apr-05 19:54:10

If it is your primary residence you don't pay CGT though. Is it your only house?

PinkFluffPudding Wed 27-Apr-05 19:57:55

Yeah, sorry... forgot to mention that. I assumed you had more than one property. If you have more than one then you have to live in the 'primary residence' for a minimum 12 months. If you are selling a secondary residence you will be taxed whatever.

LIZS Wed 27-Apr-05 19:58:31

Yes, if house is in joint names you can both claim an allownaae against CGT. Rate depends on how long you have owned the property. You can get a booklet CGT1 from Inland Revenue to show details.

SecondhandRose Thu 28-Apr-05 08:23:30

Is it legal to put a house in the name of a child therefore avoiding CGT? Or is that a firmly closed loophole?

Thanks for the other advice BTW.

frogs Thu 28-Apr-05 09:28:30

Wouldn't have thought a child can legally own a house if he or she is under 18, nor would a person under 18 have their own CGT allowance.

If over 18 you can presumably transfer ownership to the child, but any such transfer would be unlikely to be exempt from whatever tax might apply to it (eg. inheritance tax, CGT).

Essentially all the obvious loopholes will have been thought of and closed up. Sounds like you need to take advice from an accountant or tax expert wrt ways of legally minimising your tax liabilities.

piffle Thu 28-Apr-05 10:05:06

if your house is mortgaged at all, transferring to children is usually a no no.
And then to get it back again is a major hassle. Conflicts of interest left right and centre
You can set up a trust which can include property which can circumvent some tax issues, but this is usually applicable for a number of properties and wealth...
If you are simply selling your house and buying again then I did not think CGT was payable though.

SecondhandRose Thu 28-Apr-05 10:50:44

Thanks, good to know we'd get two lots of tax relief. The house was bought as an investment and has a tenant and she is interested in buying it. Hence the questions. Thanks everyone.

Uhuru Thu 28-Apr-05 11:01:53

Did you ever live in the house SHR as your only or main residence?

SecondhandRose Thu 28-Apr-05 17:38:31

Sadly no, it's too far away.

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